Paychex (PAYX) Q4 2025 earnings summary

Executive summary

• Achieved 10% revenue growth in Q4 and 6% for the full year, driven by the Paycor acquisition, organic growth, and continued execution across business lines.

• Completed Paycor acquisition and integration, expanding market reach, SaaS HCM platform leadership, and product offerings.

• Raised cost synergy expectations to $90 million for fiscal 2026, with additional synergy opportunities identified.

• Client retention rates increased year-over-year, with the client base growing to approximately 800,000 and HR outsourcing work site employees reaching 2.5 million.

• Returned $1.55 billion to shareholders in FY25 through dividends and share repurchases.

Financial highlights

• Q4 total revenue increased 10% to $1.43 billion; full-year revenue reached $5.57 billion, both up 6% year-over-year.

• Q4 adjusted operating income grew 11% to $576.7 million; adjusted diluted EPS increased 6% to $1.19.

• Full-year adjusted diluted EPS was $4.98, up 6% year-over-year.

• Cash, restricted cash, and investments totaled $1.7 billion; total borrowings at $5 billion as of May 31, 2025.

• Cash flow from operations was $2 billion; over $1.5 billion returned to shareholders via dividends and buybacks.

Outlook and guidance

• Fiscal 2026 total revenue expected to grow 16.5%–18.5%, with Paycor contributing 12–13 points.

• Management Solutions revenue expected to grow 20%–22%; PEO and Insurance Solutions 6%–8%.

• Adjusted operating income margin expected at ~43%; adjusted diluted EPS growth of 8.5%–10.5%.

• Effective tax rate expected at 24%–25%.

• Q1 revenue growth anticipated at 16%–17%, with adjusted operating margin between 40%–41%.